We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

EUR/GBP has experienced strong moves in both directions lately with ‘Brexit/Bremain’ news-flow pushing sterling around. The cross is currently trading around resistance between roughly 7750 and 7780. A ‘head-and-shoulders’ pattern triggered on 5/18, but since then we have seen a push back towards a retest of the ‘neck-line’. Not far above this resistance level lies an upper parallel running lower off the 4/7 peak (‘head’).

With uncertainty regarding the EU referendum dominating sentiment, price movement in both directions in GBP should find opposition. If that is to continue being the case, then there should be opportunity on both sides of the tape.

The trend lower off the April high in conjunction with a still functioning H&S top suggests selling resistance right in the current vicinity offers up good risk/reward for seeing another decline back towards the recent lows under 7600. The measured move target for the H&S top is lower (~7360), but given the current environment we will be happy to take a trade back towards the recent lows. Risk/reward on the trade is ~1:2+ depending on entry point.

If EUR/GBP breaks cleanly above 7800 then risk becomes skewed upward towards the May congestion period between 7865 and 7945.

EUR/GBP Daily

Created with Marketscope II

Today, we have some event risk with US NFPs coming up at 8:30 EST/12:30 GMT time. Analyst are looking for 160k on the NFP print and a downtick in the unemployment rate to 4.9% from 5%. Signs of wage inflation via the average hourly earnings will be in scope as well. No estimate available, prior was 2.5% YoY. The labor participation rate was previously 62.8%.

About your FOREX.com Demo Account

A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment. Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account. Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment.